In construing exclusion clauses under a public and product liability insurance policy, the High Court has reassured a construction company (the company) that it will be covered for its potentially heavy losses after a tower crane collapsed, causing serious injury to its driver and substantial damage to property.
T 
he company had laid the concrete base of the crane which collapsed on a building site in Liverpool. The company had been joined in an action brought by the crane driver against the main site contractors and structural engineers involved in the project in which he sought compensation for his injuries.
The company had the benefit of an industry standard insurance policy covering it in respect of public and product liability. However, the insurer launched High Court proceedings, seeking a declaration that any potential loss arising from the accident fell within the ambit of exclusion clauses and was not covered.
The insurance contract excluded liability for, amongst other things, losses arising in connection with the failure of any product to fulfil its intended function. However, in rejecting, the insurers’ arguments, the Court ruled that, on a proper interpretation of the relevant clause, the crane base could not be viewed as ‘a product’.
In also dismissing the insurers’ plea that the contract base had failed to fulfil its intended function, the Court noted that it had come away intact when the crane fell and experts were unanimous that it had achieved its purpose of transmitting the force generated into the underlying piles.
The insurers’ reliance upon another clause – which excluded liability in respect of loss or damage to any superstructure arising from the failure of foundation works to perform their intended function – was also ill-conceived, the Court ruled.
The company had not been prosecuted by the Health and Safety Executive following the accident and the Court observed that, on the existing expert evidence, it was unlikely that the company would ultimately be found at fault or held liable for the damage and injury caused by the falling crane.